Mercia Asset Management PLC, the proactive, regionally focused specialist asset manager with c.£959million of assets under management (“AuM”) is pleased to announce its preliminary results for the year ended 31 March 2022.

We provided a live management presentation and Q&A, presented by Dr Mark Payton, Chief Executive Officer, Martin Glanfield, Chief Financial Officer and Julian Viggars, Chief Investment Officer.

 

Read the full RNS here
Visit our Prelims 2022 area here

 

Mercia Asset Management PLC, the proactive, regionally focused specialist asset manager with c.£959million of assets under management (“AuM”) is pleased to announce its preliminary results for the year ended 31 March 2022.

Highlights

  • Adjusted operating profit up c.152% to £8.4million (2021: £3.3million)
  • Realised gains and finance income totalling £12.2million generated from the sale of Faradion
  • £11.4m fair value movement in direct investments, including fair value uplift of £6.7million in nDreams following significant third-party investment
  • Profit before taxation of £27.4million (2021: £34.0million)
  • Proposed final dividend up c.67% to 0.5 pence per share (2021: 0.3 pence per share)
  • Net assets of £200.6million (2021: 176.0million)
  • Net Assets per share up c.14% to 45.6 pence (2021: 40.0 pence)
  • Cash and short-term liquidity investments of £61.3million (2021: £54.7million)

Managed fund developments

  • Third-party funds under management (“FuM”) of c.£758million (2021: c.£764million) contributed £19.5million in revenue, excluding performance fees, for the year (2021: £18.2million)
  • Cash returned to fund investors from successful realisations of c.£87million (2021: c.£27million)
  • Venture FuM c.£592million (2021: c.£600million)
    • £15.7million successfully raised across three Enterprise Investment Scheme (“EIS”) funds during the year
    • c.£15million additional allocation from British Business Bank under the Northern Powerhouse Investment Fund Equity mandate, with effect from 1 November 2021
    • Interim and final dividends totalling £17.0million paid by the three Northern Venture Capital Trusts (“VCTs”), in addition to special dividends paid of £20.8million arising from successful realisations
  • Private equity FuM c.£48million (2021: c.£54million)
    • Portfolio trading and prospects improving post pandemic
  • Debt FuM c.£118million (2021: c.£110million)
    • Accreditation awarded to the Group to deliver debt funding under the Recovery Loan Scheme (“RLS”)
    • c.£11million additional allocation from British Business Bank under the Northern Powerhouse Investment Fund Debt mandate, with effect from 1 November 2021

Direct investment portfolio developments

  • Direct investment portfolio fair value of £119.6million (2021: £96.2million), up c.24% notwithstanding the significant investment realisation of Faradion, completed in the year
  • Sale of Faradion in January 2022 resulted in total cash receipts of £19.4million (including a £1.5million loan repayment), generating £9.9million of realised gains together with crystallised loan interest and redemption premiums totalling £2.3million for the year
  • £18.4million net invested into 16 portfolio companies (2021: £15.4million net invested into 19 portfolio companies), including new direct investments into Forensic Analytics Limited and Pimberly Limited
  • Completion of a significant third-party investment into nDreams, resulting in a £6.7million fair value increase to the Group’s investment holding value as at 31 March 2022

Post year end developments

  • In April 2022 the Group’s AuM surpassed £1.0billion, with the three Northern Venture Capital Trusts raising £40.0million through the allotment of new shares, plus Mercia’s maiden Knowledge-intensive Impact EIS Fund raising £4.5million. Both successes reflect continued confidence in the track records of the VCT and EIS portfolios and the investment teams who manage them
  • Demerger from Intechnica of its cybersecurity bot-management business Netacea, to allow both companies to benefit from a refined focus on capitalising on their respective significant growth opportunities. Mercia retains stakes in both businesses post demerger equal in value to its previous holding value
  • Exciting commercial progress continues to be made by the direct investment portfolio
  • Mercia has been accredited as a carbon neutral organisation, demonstrating its commitment to ESG principles

Mark Payton, Chief Executive Officer of Mercia, commented:

“I am pleased to share a set of results that showcase the strength and maturity of Mercia and its business model. The significant success that we have seen during the last two financial years, and our positive future prospects, have been made possible by the combined efforts of everyone connected with Mercia. I would therefore like to express my sincere gratitude to the amazing portfolio companies that we have the privilege to support. As a Group, we are also very appreciative of the growing belief in Mercia from our third-party fund investors, and both VCT and Mercia shareholders, that the UK regions can deliver value and returns. Finally, I would like to thank Mercia’s employees, without whom we would not have become who we are today: #OneMercia.”

Read the full RNS here
Visit our Prelims 2022 area here

 

A Sheffield company which provides advanced ‘nurse call’ systems for care homes has secured an £850,000 investment from Traditum Private Equity and NPIF – Mercia Equity Finance, which is managed by Mercia and is part of the Northern Powerhouse Investment Fund (NPIF).

This latest round of funding will enable Arquella to expand its sales and marketing team and target the growing residential care home market across the UK and Europe. Arquella provides its cloud-based advanced nurse call system for adult social care services under the brand AIDA. The proprietary system encompasses app-based and hand-held devices which aggregate data to provide carers with real-time information on their residents’ needs, maximizing the time they spend with residents and improving care quality.

This unique technology provides an efficient management system for care home teams to not only create and deliver planned care but to accurately record and continually monitor reactive care in real time.  Using AIDA, carers are requested to specify the type of care provided at the time of delivery, recording key information which reduces administration and enables care teams to optimise response times, manage resource requirements and record care in line with Care Quality Commission standards.

The cloud-based system can be provided on a subscription model, reducing costs and enabling care services of all sizes to benefit from evolving digital technology. Arquella’s software integrates with the sector’s leading care management software providers and with existing hardware infrastructure to provide real time reporting that is transformative for a fast-growing care sector which is under considerable resource pressure.

Founded in 2017, Arquella received an initial £350,000 investment from NPIF – Mercia Equity Finance in 2020 to enable it to further develop the technology. The platform is currently used in 26 care homes with over 869 care beds.

There are currently 480,000 care beds in the UK and 3.8 million in Europe, with both figures set to rise significantly in line with the ageing population.

Steven Holmes, Commercial Director at Arquella, said:

“We’re extremely pleased to receive further investment from Mercia, with whom we have always enjoyed a strong and supportive relationship, and we’re very excited about our new partnership with Traditum.  To have our progress and vision recognised and bought into by an investor with so much experience in the healthcare technology space is a huge compliment.”

The investment in Arquella is the first from Traditum’s dedicated health technology team. Iain Marlow, Head of Investments at Traditum, said:

“The management team of Arquella have created a truly differentiated system which is able to provide greater oversight and effective management of care to residential and domiciliary patients. We are pleased to be joining the business at this exciting stage of development and look forward to supporting the business to improve patient care.”

Dan Thomas, Investment Manager at Mercia, said:

“Care homes are a fast-growing market but the sector still relies largely on old-style technology. Arquella’s next-generation systems offer huge potential to reduce the burden on carers and use data to improve safeguarding and efficiency. Having supported the company since 2020, we are delighted to welcome Traditum as a new investor to help the business to scale up more quickly.”

Sean Hutchinson at British Business Bank, said: “The Northern Powerhouse Investment Fund is pleased to have supported a company providing a crucial digital offering to the care sector. The positive impact it has for its customers is something that NPIF is proud to be a part of, and we look forward to seeing how the latest investment will take them to the next level in their growth journey.”

Mick Morris of Compellor provided fundraising advice to Arquella on the latest investment. Andrew O’Mahony and Daniel Hayhurst of Brabners provided legal advice to Traditum.  Jim Gribbon and Andy Sims of Venture Axis provided software diligence advice to Traditum.

The Northern Powerhouse Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.

Slingshot Simulations announced a partnership with the Rainforest Trust on a new sustainability initiative at this month’s Internet of Things Solutions World Congress (IoTSWC) in Barcelona- with immediate results.

Slingshot Simulations, the software-as-a-service (SaaS) tech start-up, committed to saving an acre of rainforest land for every user that signed up to their free decision intelligence and digital twin platform at the IoTSWC event. In just three days, new user signups secured the protection of 121 acres of rainforest.

Every acre saved protects the trees, natural landscape and, in turn, the species which inhabit them. This allows the tropical forests to remove CO2 from the atmosphere and contributes to a global Net Zero of carbon emissions.

The Rainforest Trust is a global conservationist organisation who aim to protect the forest land remaining in the tropics from deforestation. Pete Mills, Conservation Circle Member at the Rainforest Trust, said, “Slingshot’s knowledge graph-based decision intelligence technology allows high-speed data processing, automation, and insight for sustainability applications and at IoTSWC they took a step further by enabling new users to directly protect an acre of land for free through a platform signup.”

In addition to the practical impact each user who signed up and saved an acre had the opportunity to have the photo taken to document and share their and their company’s commitment to sustainability. Alongside this, a replica LEGO model represented each acre saved as a green LEGO block.

Participating companies included: LEGO, OMG, Microsoft, Vodafone, Oracle, Dell Technologies, Esri and many more.

Erin McCreless, Conservation Scientist and Monitoring Specialist at the Rainforest Trust, said, “Partnering with Slingshot gives us access to incredible computing power and expertise that allows us to rapidly analyze huge amounts of data. We use these analyses on a daily basis to identify areas around the world where establishing protected areas will provide the greatest benefit to threatened species”.

Chief Executive Officer, Chief Technical Officer and Founder of Slingshot Simulations, David McKee, said, “We demonstrated our sustainable digital twins at our booth at IoT Solutions World Congress as they can allow users to data process on a large scale, for the benefit of the environment. It’s a pleasure to have taken this a step further and directly save acres of unprotected rainforest to contribute to net zero.”

Visit Mercia’s Impact area here

 

Immersive Interactive – a Southport company which provides virtual reality software for the education and medical sectors – has been acquired by Florida-based Echo Healthcare Inc, a global leader in high-reality simulation.

The deal provides an exit for Mercia, which achieved an overall return of 4x its original investment. Mercia first backed the company in 2013, using funding from the North West Fund for Venture Capital and later from the Northern Powerhouse Investment Fund.

Founded in 2012 by David Salt and Chris Porter, Immersive provides interactive classrooms for primary and special needs schools and virtual simulation spaces for training emergency services and medical staff. Following the acquisition, Immersive will become part of the global Echo Healthcare organisation, while retaining its existing offices and continuing to develop and support its product line. Both Chris and David will take on senior leadership positions within Echo Healthcare.

The acquisition will allow Echo Healthcare to significantly expands its healthcare simulation offering globally, further supporting its mission to save lives and improve patient outcomes through innovation, education and technology. Both Echo Healthcare and Immersive Interactive will begin to work immediately on their shared vision to create the world’s premier virtual reality, interactive simulation spaces.

Kevin King, CEO of Echo Healthcare, said: “The acquisition of Immersive Interactive is an important step in the evolution of our suite of product offerings, allowing increased market access, an enhanced team, and a further defined value proposition.”

Chris Porter, co-founder of Immersive, added: “By joining two amazing companies together we will immediately realize gains in efficiency, access to resources, and roadmap acceleration.”

Dawn Tyler of Mercia said: “We hear a lot about virtual reality, however Immersive Interactive has been a true pioneer in the field and its work demonstrates the potential it offers to transform education and training. The company already has an international reputation, and the partnership with Echo will enable it to build on this, opening up new opportunities and providing access to a wider global audience.”

Sean Hutchinson at British Business Bank, said: “Over the past couple of years, a new age of digital learning and online classrooms has started to fully take shape and serve as transformational tool in not only education sectors, but the health industry as well. The Northern Powerhouse Investment Fund is pleased to have been a part of Immersive’s journey, providing access to finance to a Northern business at the forefront of an emerging and growing industry.”

The Northern Powerhouse Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.

Card Industry Professionals offer card payment solutions including POS, card terminals and online payments. Everyday CIP support thousands of businesses to process payments. Card Industry Professionals have a team of experienced and knowledgeable sales professionals, providing the latest, most secure and advanced hardware and software payments technology available.

A Sheffield company whose smart sensors allow industry to reduce wear and tear and cut energy costs has raised a further £1.5m from NPIF – Mercia Equity Finance, which is managed by Mercia and part of the Northern Powerhouse Investment Fund, and Mercia’s EIS funds.

Tribosonics embeds sensors within the moving parts of machinery to monitor factors such as friction, pressure and temperature. It systems incorporate advanced analytics and provide data in real time to help companies improve process efficiency, extend plant life and reduce maintenance and energy use.

Tribosonics’ technology is used in the manufacturing, energy and transport industries. The company has attracted a global client base including ENGEL, a world-market leader in injection moulding, and automotive parts manufacturer Novares.

The investment will help the company to further develop its ‘sensing as a service’ solutions including polymerSENSE, which helps to reduce waste in the polymer and plastics recycling industry. Tribosonics has increased the size of its Sheffield team by 50% since late 2020, bringing the total to 30, and expects to create a number of new jobs in the year ahead.

The latest funding round brings the total raised to date to £2.6m and follows an initial round by NPIF – Mercia Equity Finance in 2020.

Will Schaffer, Investment Director at Mercia, said: “Tribosonics is a pioneer of Industry 4.0, which will transform manufacturing through the use of connected machines. Its sensor technology offers huge potential to improve efficiency and reduce energy use, which is a key challenge for industry now. The company has maintained steady growth and built a strong blue-chip client base since the last funding round. The latest investment will allow the team to develop more novel solutions.”

Glenn Fletcher, Tribosonics CEO, said: “We’re on an exciting growth journey as we deploy our innovative, game-changing and IP protected sensing solutions to increase value for our customers and to make a significant contribution to decarbonisation across a number of industries. It’s important to have the right investors with us on the journey and Mercia has proved to be a great partner, providing not only growth capital but also invaluable support based on its experience and understanding of what it takes to grow a tech business. We’re looking forward continuing the journey, making a real difference and further enhancing our partnership with Mercia across all fronts.”

Sean Hutchinson at British Business Bank, said: “Seeing companies like Tribosonics make such an impact on their chosen markets is testament to the North’s ability to create and grow innovative companies and clearly demonstrates the impact NPIF equity funds can have on businesses with skilled teams, ambitious growth plan, and world leading technology.  With further funding, Glenn and his team will be able to roll out a number of new changes, placing them and Sheffield as leaders when it comes to developing sensing systems. NPIF aims to help unlock growth across the North of England, and with this investment, Tribosonics is another example of a business accessing finance to achieve its goals.”

The Northern Powerhouse Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.

 

A barrister who recognised the value of accurate transcriptions while working as a legal aid lawyer has launched a new system that can automatically capture witness statements.

Sophie Walker’s software is the only AI-driven transcription tool designed specifically for the legal sector.  Her Leeds-based company JUST: Access developed the technology with the help of a £300,000 investment raised from NPIF – Mercia Equity Finance, which is managed by Mercia and is part of the Northern Powerhouse Investment Fund (NPIF), and private investors last year.

The software has now been incorporated into video conferencing systems to help lawyers interviewing clients or conducting investigations to take accurate statements and comply with new regulations.

Sophie, who started her career in London, initially developed the software for use in her own business JUST: Access, which aims to improve access to justice by providing transcription services. Since moving the business to Leeds in 2021, the funding provided by NPIF enabled her and the CTO, Vinay Kumar, to develop the system as a standalone product for use by law firms and others in the sector.

The launch of the new system follows the introduction of the Court Practice Directions, which specify that witness statements must be drafted in the witness’s own words and require a signature from both the witness and the lawyer attesting to this.

Sophie, who was also a founding director of the legal aid charity APPEAL, said: “Our system makes it easy for law firms to comply with the new rules by enabling witness statements to be taken by video call and automatically transcribed to text. We believe it will help to play a major role in improving accuracy and efficiency and could have much wider applications within the legal sector and the justice system.”

Dan Thomas of Mercia added: “Transcription is vital to legal practice, but predominantly relies on old-fashioned processes, making it ripe for transformation.  The funding has helped Sophie and her team to commercialise the software and explore new opportunities in the legal sector.”

Sean Hutchinson at British Business Bank, said: “Access to finance can be transformational for ambitious businesses looking to fulfil their clear potential. The software that Just Access has developed is a great example of Northern innovation, and the kind of organisation that NPIF seeks to support. We’re proud to assist businesses in a wide range of sectors and look forward to providing even more funding to organisations looking to grow.”

The Northern Powerhouse Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.

 

A fast-growing card payment solutions provider aims to treble the size of its business following an £850,000 investment.

Grimsby-based Card Industry Professionals has raised the equity funding from both the Northern Powerhouse Investment Fund (NPIF) and the Midlands Engine Investment Fund (MEIF), managed by Mercia.

Founded in 2017, by award-winning young entrepreneur Ciaran Savage, Card Industry Professionals provides card terminals, point of sale and online payment solutions to thousands of merchants throughout the UK. It focuses on SMEs including retailers, hair and beauty salons and hospitality businesses, and offers a range of solutions to suit different trading volumes and requirements.

The company has doubled its revenue each year since it launched. The management team has also been bolstered by the addition of Ciaran’s mother, Lyn Savage, as operations director, and sales director John Selby, who, between them, have over 40 years’ experience in the payments industry.

Card Industry Professionals employs a 13-strong team in Grimsby and has a nationwide network of over 130 sales agents. It currently processes over £25m worth of transactions per month and aims to triple that number in the next 18 months. The funding will enable it to strengthen its board, create around 10 new jobs in Grimsby, and continue to expand its product range by incorporating the latest innovations in payments and fintech.

Ciaran Savage, founder and director, says: “This is an exciting moment for Card Industry Professionals as we continue to grow and develop. The investment will enable us to deliver our long-term plan to support and introduce many more merchants to new and emerging payments technology. As we shift to more contactless and digital payment methods, we want to make it as easy as possible for merchants to access and adapt to the new payments technologies available, feel supported with the implementation and enable merchants to provide the choice and flexibility to their customers. With this investment we can develop upon our portfolio of products, as well as expand our sales team throughout the UK and customer support teams based within our head office.”

Maurice Disasi of Mercia added: “The pandemic has accelerated the uptake of contactless payments and many smaller firms – particularly ‘cash-led’ businesses such as takeaways and hair salons – are having to adapt. Card Industry Professionals focuses on this underserved market and is ideally placed to help businesses make the transition to alternative payment methods. The funding will enable the company to stay at the forefront of technology and expand its market share.”

Sarah Newbould  at British Business Bank, said: “It’s good to see both the Northern Powerhouse Investment Fund and the Midlands Engine Investment Fund investing in Card Industry Professionals, providing the business with the means to expand its team, as well as develop its product and fintech offering. We encourage other businesses who are looking to grow to consider investment from the Bank’s regional funds.”

The Northern Powerhouse Investment Fund and the Midlands Engine Investment fund are supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.

 

An award-winning proptech business whose software could help improve building safety has raised £250,000 from NPIF – Mercia Equity Finance, which is managed by Mercia and is part of the Northern Powerhouse Investment Fund.

The funding will enable Hull-based Bimsense to further enhance its platform before the introduction of new rules to improve the safety of high-rise buildings. The Building Safety Bill, which is expected to become law within the next few months, will oblige building owners to ensure that safety is considered at every stage, from design to construction and occupation.

Operance enables owners and contractors to access up-to-date and accurate digital building information, providing a better understanding of a building to help ensure safety and improve efficiency throughout its entire lifecycle. The software, which incorporates blockchain technology, produces a secure audit trail and aims to comply with the government’s ‘golden thread’ requirements.

Bimsense, a specialist in building information modelling (BIM) which generates digital representations of buildings, was founded in 2016 by Ian Yeo and Scott Pilgrim, who have both advised on major developments throughout the UK and internationally.

They raised an initial £250,000 investment from NPIF – Mercia Equity Finance in 2020 to launch Operance. The software has won multiple industry awards, and is already used by a number of well-known industry names. Along with further enhancements to its software platform, the latest investment will also enable the company to create four new jobs in Hull.

Ian Yeo, CEO at Bimsense, said: “The recent issues regarding cladding have highlighted the need for greater knowledge about individual buildings and a way to track their history. By providing a modern ‘operations and maintenance manual’, Operance will play a key role in helping owners to comply with the rules and improve safety. The initial NPIF funding helped us to bring the software to market and the latest round will enable us to take it to the next level. It’s exciting to know we are at the forefront in developing this solution.”

Maurice Disasi, Investment Associate at Mercia said: “The construction sector has been slow to adopt digital technology to date. However, there is now growing awareness of the potential it offers to improve efficiency and safety and we expect the new Building Safety Bill will further drive uptake. This latest funding will allow Bimsense to further enhance the product and build its client base.”

Phil Glover, Business Development Manager at Hull and East Yorkshire Local Enterprise Partnership, said: “I am delighted to see further investment from the Fund going into this innovative Hull-based business. By using their latest software, the design and construction industry will have access to a wider range of tools to help improve building safety and deliver on our energy efficiency targets as we move towards a Net Zero economy.”

Sean Hutchinson at British Business Bank, said: “Bimsense is a great example of the fast-growing technology businesses the North has to offer. The digital economy is a key area for NPIF and it is fantastic to see this local business receive even more investment to accelerate its software launch and become leaders in building information modelling. Supporting businesses like Bimsense is key to achieving a stronger north and bringing economic growth to the region.”

The Northern Powerhouse Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.